Customer Retention is the Key to Success in the Automotive Industry, like any other Business
"The Decision Maker"
By Katie Mares CTDP, MCATD, CPSA, CSP
According to CDK Global it is 5% easier to sell to existing customers rather than gain new customers, and it can cost 6-7 times more to attract a new customer than keep an existing one.
It is your current customers that are more likely to keep the future of your business looking bright.
Knowing this, I find it baffling that dealerships and OEMs still focus their efforts on attracting new customers instead of retaining the customers they already have. And if that isn’t enough to push you over the edge, according to research from Harvard Business School, increasing customer retention rates by 5 % rise in profits anywhere from 25 % to 95 %.
Getting new customers is marketing’s job, keeping them is your job! Customer retention and loyalty is a result of being accountable to the Brand Experience you provide them.
Honor and manage your female customers as an asset
The time has come to take the female customer segment seriously after all; women are the world's economy controlling roughly 28 Trillion dollars in spending power and are the Chief Purchasing Officer in their household. Gone are the days where women didn’t have a say; they now hold the authority to make or influence almost all the decisions for herself, her husband, and family!
In a study conducted by women-drivers.com, it was revealed that 74% of women buyers feel misunderstood by car marketers and sales associates. Not only to automotive brands have a hard time acquiring new female customers through traditional marketing; they have a hard time keeping the female customer when she decides to visit a dealership.
Have you ever stopped for a moment to analyze, review or think about the enormous impact an unsatisfied female consumer has on your dealership and the brand? The number one reason a woman walks out of your dealership is that she doesn’t like the way she was treated, and when this happens, there is a downside domino effect to your dealership.
Retention = Experience Accountability
In a recent article I wrote THE CHIEF PURCHASING OFFICER DRIVES YOUR LOYALTY AND REFERRALS, I stated the simple fact that women are the original social media! Before ‘social media’ even existed; women cultivate a social world through communication amongst anyone that would listen; now the whole world listens to what women have to say. In today’s social world, women actively use social media to share what’s happening in their life with new connections, friends, colleagues, and family. Men, on the other hand, tend to use social media to gather information about a topic of interest, not share his life’s experience with all his buddies.
A Nielsen study shows that women spend nearly 10 minutes social networking through the mobile web, or through apps every day, whereas men spend a little less than 7 minutes; that’s 30% more time than our male counterparts.
The domino effect? Well, she will tell anyone who listens about her experience, and that will hurt your referral and new customer potential. Something else to keep in mind, if you have lost a female customer you’ve lost them for good! Study’s show that 55% of women who leave a dealership without purchasing will not return there.
Your female customer is an asset to your dealership, and your brand experience is what drives her satisfaction. I have listed out three steps below to help guide your journey in creating an experience that speaks to her.
If you have read this far, I am going to assume you would like to understand the female buying power in your dealership and how to start managing your female customer base as assets.
On the first stop on this journey, you’ll want to uncover how many of your customers are female, how many of them you are gaining, losing, retaining, and why. A CAR-Research study shows that the average dealership only logs about 25% of its potential customers “ups”. The question becomes, how many women are overlooked as potential buyers in the other 75%?
CSI reports can be beneficial as well. But what do your CSI scores really mean? I challenge you to look at the CSI survey results from your female consumers and dissect what they are saying at each touchpoint in their journey with you. The goal is to uncover why your customers are unsatisfied and why they don’t trust you. Do you ask your customers and team members what you could be doing differently to retain your female consumers?
Without identifying the ‘why’ you will not be able to move onto the next step, create. You must know why your female customers don’t like shopping with you before you can strategize and create a program that will make the difference in the experience she has in your dealership.
Now that you know why your female consumer base isn’t excited to interact with you, you can create the strategy and programs that will keep her coming back!
Let’s dissect the impact when a woman walks out of your store: She is buying from your competitor, she will tell her story to anyone who will listen; ultimately harming your reputation, the CSI scores will also suffer, not to mention you will lose her referrals family and friends referrals and the residual value of her service business. It’s important to get the program you create just right!
With all of the doom that lies with an unsatisfied female consumer, it only makes sense to add value for The Decision Maker to each touchpoint of the customer journey through your dealership.
Break down your journey into touchpoints (use your CSI metrics as a guide) and evaluate how and what you can do differently at each touchpoint to tailor the Brand Experience to the female consumer.
Use this information to create a playbook that each team member can use to help them be successful when serving a woman on the sales floor or in the service drive.
Sustainability and operationalizing your strategy and programs is where the hard work starts! Train your team members for success by reviewing the new standards. Daily huddles, roleplays, and customer focused conversation is a great start. If you want your customers to feel important you have to believe they are an asset to your dealership; you must make all decsi9ons with the customer in mind; especially the female consumer.
Moving from a siloed approach to a ‘one-dealership’ approach will open the door up for your team members to focus on solutions at each touchpoint; through the customer’s eyes.
Ture operationalizing of a program happens only when preparation (strategy and program) meets accountability and genuine customer focus.
Drive action with an attitudinal behaviour shift. Start small and grow the right to having customers as assets, focus on each touchpoint and how you can improve the experience for The Decision Maker; The Woman and all the customers that follow. Earn her loyalty and retention so you can earn her trust and referrals. Be accountable to the experience you provide.
Katie Mares CTDP, MCATD, CPSA, CSP is available to train your organization and brings her expertise to the automotive industry. She is a dynamic speaker at Women in Automotive and Digital Dealer Conferences. Among her offerings:
- Program Development
- Brand Standards
- Leadership Development
- Coaching Sessions
- Retail Workshops
- In-Dealership Implementation
- Ongoing Support